Air France KLM shares rise on hopes of union pay deal

PARIS (Reuters) – Air France KLM (AIRF.PA) shares rose on Thursday, which traders attributed to a report on the website of business publication La Tribune that Air France would put forward a pay agreement proposal to unions later this week.

FILE PHOTO: The Air France-KLM company logo is seen during the company’s half-year results in Paris, France, August 1, 2018. REUTERS/Benoit Tessier

LaTribune.fr reported the pay deal could be proposed to unions on Friday. An Air France spokeswoman declined to comment on the matter.

Air France KLM shares were up 5.3 percent, although the stock remains down nearly 40 percent so far in 2018, mainly due to the impact of staff strikes over pay that have cost the airline over 300 million euros ($346 million).

Benjamin Smith took over as Air France KLM’s chief executive last month. Smith faces having to overcome union resistance to reduce the French unit’s swollen cost base while keeping increasingly frustrated Dutch staff on side.

The French state has a 14 percent stake in Air France KLM, while Delta Airlines (DAL.N) and China Eastern Airlines (600115.SS) each hold an 8.8 percent stake.